Yes, I know, you never think the IRS is on your side, but it is. Maybe you noticed that a number of fraudulent tax preparers were apprehended over the last several years. Tax preparers were creating fraudulent returns - often to their own benefit, while taking advantage of the taxpayer's lack of knowledge about their own tax situation, but at other times, it appeared that the taxpayer was in on the deal, accepting large refunds that they were not qualified for. Like these guys..., this guy, and this guy...
Before, pretty much anyone could set up shop and prepare your taxes...resulting in the scenarios noted above. Although the majority of paid tax preparers are honest and ethical, unfortunately there were fraudulent tax preparers in the ranks, who targeted among others, groups that may not have been savvy about their taxes, or may have wanted their money in a hurry, at any cost. To make matters worse, these preparers were generally not accessible after tax season when the taxpayer had to respond to an IRS letter investigating the irregularities.
The IRS is now implementing new regulations that require tax preparers that are paid for their services to have a Preparer Tax Identification Number (PTIN) before they can prepare your 2010 taxes, including your CPA, your attorney, or enrolled agents. Even if they had a PTIN previously, they must re-apply. There is also a fee for obtaining the ID number, which should hopefully reduce the ranks of those who just shouldn't be preparing your taxes.
Now that you know that your tax preparer / tax advisor should have a registered ID number, it is in your interest to ask if they do.
Coming soon, tax preparers will be required to be certified.
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